CFA Level 3: Derivatives - Delta Hedging

Learn how to construct a delta-hedge a short call option position and rebalance it later. The same concept can be applied to put options.

[dhirajkapur]

Fabian, your videos are very informative and easy to understand even when you are explaining a rather complicated concept. Thank you!

[pandreou]

At 2:34. We sold 1000 calls with a premium of 5.3, and we keep the premium, therefore shouldn't the value of the portfolio be 1000*5.3 + 443*60= 31880?

[maximusfabius]

Great video, thanks a lot. Does using 1000 options mean that we basically used 10 options each one of which has a multiplier of 100 stocks or it doesn't matter much how we look at it?

[likeicare]

Since you hedge the delta, and still keep the premium you can make unlimited gains on your money without any risk. If only real life was as simple as textbook examples lol

[jasontsui]

In this example, the company QuillLabs has sold 1, 000 call options on a stock. After selling the options, it gets cash right? Or if it is an option writer, won't it receive option premium after selling the call options to someone? I am confused about the selling call option concept.